Economic empires rise and fall. Three decades ago, no one could have thought that China would surpass all of the world’s economies except for the United States. Yet, by 2030, it is estimated that China will go over the economy of the United States.
Even the United States has dependencies on China as far as its economy is concerned. Analysts predict that the global GDP will double between 2022 and 2035. The prediction is that by 2022, the global GDP will hit $10 trillion for the first time. In 2035, the prediction is $200 trillion.
The world is flexible. Many people thought that the Covid-19 pandemic would shut down economies—it did for a while, but there was a resurgence in people’s expenditure. Many people have now come accustomed to living in the presence of the virus.
The GDP forecast of analysts indicates that the top four economies in the future are China, US, India and Japan. Below are some projections.
- China – $42.740 trillion
- US – $28.146 trillion
- India – $18.016 trillion
- Japan – $6.243 trillion
Japan has a new prime minister, and this means the country is expecting a new fiscal stimulus. Fumio Kishida, the new prime minister, is pivoting away from his predecessor’s approach.
Instead of a balanced fiscal policy, the new leader is set to focus on inequality. He plans to revive the economy more than achieve fiscal balance. In his campaign, he said that his administration would not implement consumption tax in the succeeding years.
What he is proposing is higher taxes for high-income earners. As such, he will be implementing new economic policies.
In November of 2021, the cabinet of the new government proposes a 55.6 trillion yen stimulus package to revive the economy. The plan to grow the country’s economy will focus on funding universities. Digitalization will also be a key priority to promote productivity growth.
Japan is also beginning to show relaxed laws, especially in the gambling industry. Today, there are online casino Japan websites that people can go to where they can place wagers—another strategy for an economy to boost its income.
The world is looking at India as it is poised to accelerate its growth in the upcoming years. The GDP of India grew by 8.4% year over year. Despite being lower than what was expected, growth is still strong because of exports and the global economic recovery.
Consumption dwindled during the pandemic. Consumers are not apprehensive because of the uncertainties. Among its peer nations, India slowed down in its growth. Today, India has the highest deficit compared to other nations of the same levels.
The economy is gradually experiencing a recovery. There is probably no need to release stimulus packages to its constituent. India is also likely to use flexibility in how it makes new fiscal policies to support the economy.
The projected future of the economy is that it will grow between 8.7% and 9.4% in 2022. In the future, this growth is likely to be sustained and remain stronger.
To get to higher levels, India will support upper-middle and higher-income households and encourage them to spend. Travel will also be a key aspect as its driver in its economy. The country will boost tourism to put to use its hotels, theatres and restaurants.
The US economy expanded in the last quarter of 2021. It grew by 6.9%, bigger than the last five quarters. The biggest contribution came from motor vehicle dealers and intellectual properties.
The US is facing the problem of inflation, but there is optimism in the land. The core inflation is continuously improving, and the prices are merely being driven by the pandemic. Prices of goods and services will soon stabilize, and people can count on stability soon.
The US is also focused on creating jobs for its constituent. It does remain a problem today. The country added only 235,000 positions recently, but there is an expectation that this will improve as the pandemic situation gets better.
While the US economy is improving, the pandemic is pulling it down. The level of imports is rising, and it contributed to a trade deficit of $80.2 billion.
The forecast for China’s GDP is at a growth of 5.1% in 2022. The country is paying attention to improving its policies. For example, China implemented rent policies, which allowed business owners to save millions of yuan in rent.
Companies also enjoyed lower taxes. As such, they have more money to spend on research and development. The tax cuts will help the country exceed 1 trillion yuan (about 156 billion USD) in tax savings—more savings, more money to spend on developing new products.
China also started the Regional Comprehensive Economic Partnership. It is the world’s largest free trade deal. It sends a strong signal to global investors that China is open for business.
Countries rise and fall as far as economies are concerned. For a long time, European countries have been dominant. The US took this power over the United Kingdom, and it is during this period we are seeing Asia becoming a dominant force in the global economy.
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